Chapter 10.docx - The party who has the right to exercise a...

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The party who has the right to exercise a call option on bonds is the issuer . bearer. investment banker. bondholder. On January 1, 2017, Istanbul Inc. sold bonds with a face amount of $7,000,000 and a contract rate of 10% for $6,197,065. The effective-interest rate is 12%. Interest is payable annually on January 1 Istanbul uses effective interest amortization of premiums and discounts. What amount should Istanbul report as interest expense for year ended December 31, 2017? $619,707. $840,000. $700,000. $ 743,648 . When authorizing bonds to be issued, the board of directors does not specify the
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selling price. total number of bonds authorized to be sold. contractual interest rate. total face value of the bonds. Either the straight-line method or the effective-interest method of amortization will always result in more interest expense being recognized than if premium or discounts were not amortized. the same carrying value each year during the term of the bonds. the same amount of interest expense being recognized each year. the same amount of interest expense being recognized over the term of the bonds. The adjusted trial balance for Beneteau Corporation at the end of the 2017 included the following accounts: 5-year Bonds Payable 8% 4,620,000 Interest Payable 240,000 Notes Payable (3 mo.) 50,000 Notes Payable (5 yr.) 1,650,000 Mortgage Payable (€150,000 due currently) 2,000,000 - 150000 Salaries and Wages Payable 68,000 Taxes Payable (due 3/15 of next yr) 85,000 The total non-current liabilities reported on the statement of financial position at December 31, 2017 are
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€8,360,000. €7,880,000. €8,030,000. 8,120,000 . Julie's Boutique has total receipts for the month of $41,580 including sales taxes. If the sales tax rate is 5%, what are Julie's sales for the month? $39,501. $39,600 . $41,580. It cannot be determined Bonds issued against the general credit of the borrower are called a sinking fund bond.
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mortgage bonds. callable bonds. debenture bonds . On January 1, Cleopatra Corporation issued $7,000,000, 14%, 5-year bonds with interest payable on December 31. The bonds sold for $7,504,670. The market rate of interest for these bonds was 12%. On the first interest date, using the effective-interest method, the debit entry to Interest Expense is for $ 900,561. $878,437. $840,000. $980,000. The interest charged on a ¥250,000,000 note payable, at the rate of 6%, on a 60-day note would be ¥15,000,000. ¥3,750,000.
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¥2,500,000 . ¥8,333,333. When the effective-interest method of bond discount amortization is used, the applicable interest rate used to compute interest expense is the prevailing market interest rate on the date of each interest payment date. interest expense will not be a constant dollar amount over the life of the bond.
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  • Spring '17
  • Expense, Generally Accepted Accounting Principles

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